Excluding construction and energy, industrial production decreased 0.4 percent from the previous month.

Energy output dropped 3.2 percent and construction fell 0.3 percent.

On a year-on-year basis, industrial production increased 1.6 percent in October after a 0.7 percent gain in September. Economists had expected a 2.1 percent rise.

Automobile production shrunk 0.5 percent after a strong recovery in September, the Economy Ministry noted. The decline suggests that the problems due to the transitions to the WLTP emissions testing regime have only started dissipating.

Strong new orders for automobiles and a larger variety of passenger cars under the new standard indicate that the rate of growth of the German industry is set to pick up again in during the rest of the fourth quarter, the ministry added.

Figures released on Thursday revealed that manufacturing orders unexpectedly increased for a third straight month in October, led by strong foreign demand, especially from euro area countries.

"Taking the trend of the last three months, German industry has at least not lost more momentum but instead is treading water."

Meanwhile, the latest purchasing managers' survey showed that manufacturing growth fell to a 31-month low in November as new orders fell for a second straight month and at the fastest pace in four years.

Separate data from the statistical office showed on Friday that labor costs rose 1 percent sequentially in the third quarter, which was the biggest gain since the final three months of 2016.

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